Global venture capital firm Index Ventures has raised a new €500 million growth fund, only a quarter of which will be invested in US companies. The firm will direct the other 75% to companies in Europe, which it defines as including Israel.
Index Ventures has already invested in Israeli companies and partner Saul Klein has resided in Israel for the past two years. He told the "Financial Times", "As with all other Index funds, the heart and soul of the fund is based in Europe and will be invested in Europe, but it definitely has a US component."
He added, "If you look at the macro conditions of the fundraising market, smart entrepreneurs whether in Tallinn, Tel Aviv or Silicon Valley now have an abundance of sources of capital - whether really early stage like Seedcamp or disruptive marketplaces like AngelList, capital is much more visible now.”
According to the "Financial Times", "With its new Growth fund - Europe’s biggest raise for five years - Index plans to take minority equity stakes of €10m to €50m in fast growing companies that need an extra boost for three to five years, ahead of an IPO."
Index Ventures was founded in 2006 and manages $4.7 billion. Originally based in Switzerland, it now has offices in London and San Francisco. It uses the Eurovision and UEFA definition of Europe, which includes Israel. 40% of its current portfolio companies are in North America, 10% are Israeli, including OpTier Ltd., MyHeritage Ltd., Zend Technologies Ltd., Soluto Ltd., NovoCure Ltd., and Worklight Ltd.
Index Ventures has chalked up some quite successful exits, including Skype, MySQL, and, a few months ago, the sale of Cloud.com for $200 million. It has had 15 exits in the past year alone
Klein says that Index Ventures' new strategy in Israel will enable it to invest amounts ranging from $50,000 to $75 million, depending on a company's needs. He added that, as it expands its Israeli operations, it would invest in IT, software, and internet companies, as well as in mobile and medical devices developers.
Index Ventures is the latest Israeli and foreign venture capital firm that is seeking mid-stage Israeli companies. The list includes Jerusalem Venture Partners (JVP), a group of former Evergreen Venture Partners partners, and Vintage Investment Partners, which is trying to raise a new fund. Israeli growth-stage companies are struggling to raise capital from local and foreign venture capital firms, because, unlike early stage companies, they need substantial amounts of money to make the next jump.
Published by Globes [online], Israel business news - www.globes-online.com - on November 9, 2011
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